Employment reports show mixed picture

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NEW YORK (CNNMoney.com) -- The private sector lost more than 700,000 jobs in March, according to payroll-processing firm Automatic Data Processing, but a separate report released Wednesday suggested that the pace of job cuts may be slowing.

The ADP report, which is based on payroll data from 500,000 U.S. businesses, said the private sector eliminated 742,000 jobs on a seasonally adjusted basis in March. That up 36,000 from last month's revised figure of 706,000.

It was the largest decline since ADP began tracking the data in 2000, and was steeper than the 663,000 loss that economists surveyed by Briefing.com had forecast.

Joel Prakken, an ADP spokesman and chairman of Macroeconomic Advisers, LLC, said he expects to see "sizeable declines" in payrolls for "several more months."

"We don't see anything in the data that we examined that suggests a glimmer of hope," Prakken told reporters in a conference call.

Payrolls shrank in all sectors of the economy with sharp declines among small and medium-sized businesses, according to the ADP report.

Separately, Challenger, Gray & Christmas Inc. reported that the number of planned job cuts announced in March fell for the second straight month.

Job cut announcements by U.S. employers totaled 150,411 in March, a decline of 19.3% from February's 186,350 cuts, which was down from a seven-year high in January, according to Challenger.

The March figure was the lowest since October but still 181% higher than the 53,579 job cuts announced in the same month a year ago.

The government/non-profit sector was hit the hardest, Challenger said, with 25,324 announced job cuts in March. The pharmaceutical industry had the second highest tally of planned cuts, most of which will come following Merck's acquisition of Schering-Plough.

The financial industry accounted for 8,651 job cuts, down 36% from February.

"The good news is that job cuts appear to be stabilizing in the financial sector," John Challenger, chief executive officer of Challenger, Gray & Christmas, said in a statement. "Unfortunately, other sectors are seeing an increase in cuts as the recession works its way through the economy. State and local governments across the country are struggling with falling tax revenues as more and more people lose their jobs and homes," he said.

In the first three months of the year, employers have already announced 578,510 job cuts. That is 188% percent higher than the 200,656 job cuts announced in the first quarter of 2008, Challenger said.

The report paves the way for the government's monthly jobs report due Friday. The Labor Department report is expected to show that the economy shed 656,000 jobs in March, more than the 651,000 reported for February, according to a consensus estimate of economists complied by Briefing.com. The unemployment rate is forecasted to rise to 8.5% from 8.1%.